Mortgage rates are expected to see a decline this year after peaking at 8% in October of 2023, an expert suggested.
Speaking to news out 3NEWS, Brian Morales, the CEO of Corpus Christi Association of Realtors, predicts mortgage rates will fall this year if the U.S. Federal Reserve reduces their interest rates.
"A lot of people are predicting in the next year, over the next 12 months, that the fed will be reducing their interest rates. When those rates go down, mortgage rates typically follow, so we may see some lower mortgage rates in 2024," he said.
Morales also added that more people may set their sights on buying a new home when mortgage rates fall.
Morales is not the only expert predicting mortgage rates to fall this year. The National Association of Realtors (NAR) believes the average mortgage rate will fall to 6.3% by 2024's fourth quarter. In comparison, mortgage rates settled at 7.8% in the final three months of 2023.
Current Mortgage Rates
Mortgage rates for the 30-year fixed term rose last week to 6.62% after falling for nine consecutive weeks, according to Freddie Mac. However, the mortgage rate for the 15-year term fell by 0.04 points to 5.89%.
Despite the tiny increase, mortgage rates have fallen more than a full percentage point after it reached a 23-year high in October.
While many factors affect mortgage rates, it is believed that the uptick is linked to job growth, which increased by 216,000 in December, according to the latest employment and unemployment data from the Bureau of Labor Statistics (BLS). The bureau only forecasted 170,000 new jobs for last month.
By sector, the leisure and hospitality industry gained 40,000 new jobs. Employment gain was also seen in the sectors of construction, with 17,000 new jobs; and information, with 14,000 new positions. Government work has seen the largest one-month increase, with a gain of 52,000.
However, some sectors also reported job losses. Couriers and messengers lost 32,000 hobs. Employment in the transportation and warehousing sector also fell by 100,000 in December, the BLS states in its report.
